Which of the following option influences the "Keynesian Investment Multiplier"?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Marginal propensity to consume
The formula for Keynesian Investment Multiplier is:
k = \(\frac{1 }{\text 1 - MPC }\)
Thus, any change in value of MPC would cause an influence on "Investment multiplier".